Pivot – The tenth P of the Marketing Mix
Paul Mills, Chief Marketing Officer at Shaw & Co, shares his thoughts as to why marketing must become the functional beacon of hope for companies to navigate what could become the deepest global recession in history.
Since early March 2020, new words have entered our conscious vocabulary; unprecedented, lockdown, furlough, social distancing, self-isolation to name but a few. But there is another word that is becoming more frequently used in the corporate world – and that word is ‘pivot’ – which Eric Ries described as being “A change in strategy without a change in vision.”
In recent weeks the invisible Covid19 has turned the whole world upside down. The price of oil turned negative. Millions of pints of beer are being thrown away due to pub closures. Richard Branson offered Necker Island as collateral for his ailing airline. And in April, Tesla replaced the Fiesta as the top selling car in the UK.
As governments around the world enforced social lockdown, supply-demand curves were also flipped due to rapidly changing consumer behaviour. Toilet rolls, hand sanitiser and pasta suddenly became rarer than a Buzz Lightyear at Christmas. A spotlight was pointed on global supply chains and their fragility shone brightly.
During all the chaos of the last two months, C-suite executives in companies across the globe have had to cope with market forces that – truth be told – were never even mapped on their whiteboards nor written into their corporate strategies.
How many CEO’s had contingency plans for the massive shifts in demand for products and services, severe disruption to supply chains and long-term furloughing of employees caused by a measly virus? Who on earth could have predicted such events?
Well, as it happens, Bill Gates’ TED Talk in 2015 predicted the next global catastrophe coming from a highly contagious virus instead of terrorism and war. You can go back further to 2011 when Hollywood released the film Contagion – which funnily enough is quite popular on Netflix right now.
Despite the clues being available, very few businesses make contingency plans based on Hollywood fiction or TED Talks. So what many companies are facing right now is the challenge of how to compete (or survive) in a marketplace that resembles a bowl of tangled spaghetti. Which brings me back to the word I mentioned earlier – pivot.
Now, us marketers like to live in simple paradigms. In the 1960’s, McCarthy famously brought to the world the 4Ps – otherwise known as the marketing mix – which to the unacquainted refers to the four broad levels of marketing decision making: price, product, place and promotion. Over the decades, the marketing mix has steadily grown to become the 9Ps and now includes people, packaging, processes, policies, and profit as the other Ps.
But as a senior marketer who is living and breathing during these unusual times, I believe a tenth P should be added to the marketing mix – and that P is pivot. Arguably right now, the role of the marketing function becomes the most important discipline as businesses across the globe try to find ways of navigating an unpredictable macroenvironment. And the businesses that are most likely to come out of this storm in a stronger position are those that successfully pivot themselves to take advantage of the new market environment. This needs to be led by strategic marketing.
The purpose of strategic marketing is to satisfy the needs and wants in the marketplace better than your competitors. Organisations that align their internal resources most effectively to take advantage of the market opportunities are more likely to generate a competitive advantage. This typically manifests itself by offering products or services that are better, different or cheaper than the competition.
Right now, we are seeing extreme shifts in the consumption of products and services. One service particularly affected by Covid19 is gyms. Despite the recent easing of lockdown restrictions in the UK, gyms remain out of bounds to people wanting to exercise. The main threat to the survival of gyms right now is one man doing exercises in his front room and sharing it for free on YouTube – Joe Wicks.
There are other celebrities and organisations offering a fitness from home proposition – but Joe seems to have hit a sweet spot by focusing his efforts on school children. He’s a smart man and his brand value has no doubt shot through the roof over the last two months.
So how do gyms, restaurants, pubs, hotels and all the other organisations that have been affected by social lockdown pivot to survive? The true answer will be firmly rooted in the cultural makeup of the organisation. Do you remember all those townhall meetings you’ve been to where the CEO stands up and says “I want us to be more innovative”? Remember how many colleagues paid lip service to those meetings? Were you one of those people that belittled the idea for a suggestions post box to be put in communal areas? Those naysayers could be part of the reason for their company going out of business!
Truly innovative organisations with employees who are agile and adaptable to change will survive this crisis and come out of it stronger than when they entered it. BrewDog, the Scottish brewery and pub chain, is a great example of an organisation that has pivoted its business at a time of declining demand for its products. By rapidly adapting the use of its brewing facilities to produce hand sanitiser will become a case study of how to adapt.
Snaffling Pig, another success story pre-Covid has seen demand of its “piggin’ awesome flavoured porky snacks” suffer due to pub closures. However, the Berkshire based company is pivoting to focus on the home delivery side of its business and continues to do well. Its entrepreneurial owners have also just set up a new consultancy business leveraging their own expertise in distribution to help other organisations.
My conclusion is that from now on, the modern marketer needs to include ‘pivot’ as part of the marketing mix. And it’s not just pivoting products or services that we need to focus on. We also need the ability to pivot how we communicate and engage with our audiences. We must be able to pivot in response to what our competitors are doing. We need to pivot the minds of our stakeholders and be brave to pivot our existing marketing strategy across each element of the marketing mix.
Pivot therefore represents the collective cultural capacity of an entire organisation to adjust to the opportunities and threats in the market environment. And the role of the modern marketer is to influence stakeholders to pivot the organisation in the right way and at the right time.
Paul Mills, Chief Marketing Officer
Following a successful career as an analytical chemist in a global pharmaceutical company, Paul turned his attention to a career in marketing. He has held senior leadership roles in the healthcare, high-tech, legal, professional and financial services sectors and has operated in start-ups, SMEs and global matrix organisations. Paul’s passion is transforming organisations to become more competitive and does this by disrupting the business model to generate an unfair competitive advantage in the market.